Posted: Thu Nov 29, 2007 8:56 am Post subject: Re: Our Money System and Oil Depletion; Are they Compatible?
I do not know about money system and oil depletion, but credit markets seem to have some pretty serious disconnects with reality in which homeowners were able to borrow against home equity, but now that those loans are upside down they can keep their homes. That just sounds like poor credit decisions coming back to haunt over-zealous lenders.
Quote:
Easing credit conditions allowed home equity loan volume to triple in the decade ending 2005, when volume first topped $1 trillion, according to the Harvard Joint Center for Housing Studies. Many lenders are now cutting back. Wells Fargo this week significantly curbed its home equity business conducted through brokers.
"It's hard to gauge which lenders are most at risk, but pretty much any large lenders will have exposure because most made piggyback loans in the last three years," said Guy Cecala, publisher of the newsletter Inside Mortgage Finance.
"Many were squirrelly deals to let borrowers work their way around underwriting requirements," he said. "In a declining market, borrowers are realizing it was a bad idea to take out the second mortgages. Theyarealsolearningthataslongastheykeeppayingontheirfirstmortgages,they'llkeeptheirhomes."
Fed: High energy, food prices keep economy weak
June 12, 2008
Quote:
On Wall Street, stocks tumbled as soaring oil prices fanned inflation concerns. The Dow Jones industrials plunged 205.99 points. Oil prices closed at $136.38 a barrel. Gasoline prices reached another record — a national average of $4.052 a gallon.
One of the things the Fed will be paying close attention to is the extent to which people think prices (i.e, oil) will keep going up, something that can make them act in ways that would worsen the inflation climate. If such "inflation expectations" were to "drift higher or even to fail to reverse" that would have "troublesome implications," Donald Kohn, the Fed's vice chairman, said in a speech Wednesday.
James Bullard, president of the Federal Reserve Bank of St. Louis, echoed that point. "It is rule No. 1 in modern central banking that inflation and inflation expectations be kept under control," he said.
{my emphasis}
....so there you have it from the Fed, their #1 goal is to manage "inflation expectations" regarding rising oil, food and, commodity prices. At least we can know what to expect from the Federal Reserve when it comes to discussions about Peak Oil.
Posted: Thu Jun 12, 2008 2:20 pm Post subject: Re: Our Money System and Oil Depletion; Are they Compatible?
MonteQuest wrote:
"Houston, we have a problem." The world's present industrial civilization is saddled with a dilemma: how can a debt-based monetary system based upon infinite growth in a finite world deal with resource depletion? Quote me and answer that question with your reply.
Resource depletion is a relative term. As science progresses the definition of both the terms resources and depletion evolve and mutate. Thomas Malthus projected starving humanity based on finite arable land and decreasing returns but what he didn't account for was the exponential growth of production as technology progressed... what we have to realize is that in the scope of history this is not the first instance where the sky has seemed to be falling when in fact it we where just standing under a tree and got hit with a nut...
We are Dependant, presently, on oil and other fossil fuels... but even with current growth we have plenty of those fuels to, assuming continued trends in efficiency, last through the next century at least... to assume that this one energy source is the end all be all is preposterous. Horses and oxen gave way to water and wind mills then to steam engines then to internal combustion and nuclear... to assume that the train must end is simply unfounded. All of these energy sources are simply stored solar energy... horses eat grass, wood and coal for steam engines are derived from solar energy and even gasoline for internal combustion was once solar... I guess nuclear is an exception but the point remains... the sun isn't out of energy and therefore we are not out of energy we simply have to find a new method to store and use it... but we have at least a century to do it from all reports I've seen no one projects fossil fuel reserves running out before that. ALL carbon based fuel sources are chemically stored solar energy... our energy source is not running out the sun is alive and well! We simply are need of new technology to maintain present growth into the next few centuries which has been the case before and has always been accomplished!
Now I see your point about debt and increasing costs of energy preventing big growth and I want to go on record as saying I'm a big fan of small government with control of almost everything being on a personal or local level.. call me a libertarian or whatever but I hate debt.. I hate that a huge part of our budget is spent funding the debt and then we add too it each year... but we are not approaching the need for negative or even slowing growth long run IMO. I don't see the proof. Oil and other energy is over priced and unsustainable at these levels because the industry dropped the ball. The high prices in the 70s lead to low prices in the 90s and the lows prices in the 90s lead to insufficient supplies now! Not to mention the speculation allowed by making all of the futures markets and the political uncertainty... we are in an energy bubble no different then what we saw in the 70s except the culprit isn't as clear as blaming OPEC this time now its more complex but it is the same principle. The industry was operating on a $40 long run trend for oil because of th $12 barrels of the 90s and didn't see the huge growth coming from the second worlds like India and China. These two issues diverged and caused the "crisis" we have now. This is short run effect that is unsustainable! Ethanol is now cheaper... significantly, than oil and bio-diesel is becoming feasible along with about 500 other alternative energy fuels and efficiencies that will in time drop demand domestically while supplies are rising internationally.
That said... If I was in charge at the moment I would move quickly and auction off rights to drill in the Gulf, off the coasts, west and east in Alaska. I would demand caution to protect the environment and a large bond for clean up if something where to happen... I would take the auctioned rights and royalties and dump them into efficiencies and alternatives domestically to build infrastructure to increase clean coal power plants converged with algal recapturing and processing into bio-diesel as well as building nuclear, hydro, geo-thermal and other power sources that are here but need infrastructure. I would use the huge supplies that are sitting right here at home to surge supply and lower domestic prices while using the funds to build an infrastructure to replace those sources when they are gone. I would continue to increase efficiency standards nationally as well as increasing a move to clean coal / algal production. I think that by the time domestic resources where spent we would be a net exporter of energy to countries like India and China rather than a net importer! I'd love to hear feedback... but please don't tell me that algal fuel is impossible... I've heard those arguments and they are unfounded its simply a matter of technology and infrastructure.
This would effectively help us to reduce the national debt... strengthen the dollar... become energy independent.. create a new export industry... help the environment and most importantly stop all the Malthusian chicken littles who keep telling me the sky is falling and we are all gunna die!
Posted: Thu Jun 12, 2008 2:29 pm Post subject: Re: Our Money System and Oil Depletion; Are they Compatible?
desultorypawn wrote:
LoneSnark wrote:
Banks do not literally create money. For every dollar they take in, they can send out one dollar to someone, no more.
This is completely wrong. Fractional Reserve Banking allows banks to "create" as much money as they can as long as they have the correct fraction of their deposits in the safe(but who is going to really keep an eye on that?).
Thats true I think the ratio is 20%... there are agencies who make sure that they keep those reserves trust me!! They are checking the banks book pretty regularly plus most of those reserves are on deposit with the federal reserve... who loans some out... yet another multiplier... but they know this and the numbers we use take that into account. Thats why we look at M1 M2 and M3 ... all three money supplies measure differently... but its all in the numbers... it matters but not to us lol ... but even though it does loosen supply. Banks can loan out 4/5 dollars on their books. which means for every dollar of yours they have 80 cents is being spent by someone else... this has no real baring on the money flow at this point though this has been the basic standard at least since the S & L bailouts back in what the 80s. If you want to blame something for a weak dollar look at the Euro and our refusal to use the tons of energy we have here at home. Those are the two biggies. We have plenty of coal and oil we just don't want to use it because it might be ugly... and the Euro has allowed for large investors to safely be denominated in something other than the dollar... the dollar was the only market that bear big investments prior to the Euro now there are two markets big enough for the big boys to get in and out with making any real difference. I'll be happy to elaborate on the Euro thing if anyone doesn't fallow that... it took me a while to get it and I didn't explain well here.
Posted: Tue Jul 01, 2008 3:22 am Post subject: Re: Our Money System and Oil Depletion; Are they Compatible?
"We don't sell futures. It's prepurchased gas,"
Quote:
NEW YORK (Reuters) - The high price of gasoline has some U.S. drivers looking to the future.
A recently introduced service called MyGallons.com allows drivers to fill up their tanks sometime in the future but at current prices, using a debit-like card which banks gallons rather than dollars.
"The price of gasoline was changing all the time. It seemed unpredictable," Steven Verona, founder and owner of the Miami-based company, said on Monday.
"It seemed there had to be a way to fix the price," he said.
Working on the assumption that the price of gasoline will continue to rise, Verona started about two and a half years ago to put together the company which gives the driver some measure of control of what he pays for gasoline.
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